Opponents: kill AT&T bid for T-Mobile, Qualcomm licenses at same time

Five media reform groups say it makes no sense for the FCC to consider the AT& …

The Federal Communications Commission has launched the pleading cycle for the proposed merger of AT&T and T-Mobile. The union would make AT&T the nation's largest wireless carrier, with over 41 percent of wireless subscriber market share. Whether you love or hate the idea—get your feedback to the FCC soon. Petitions to deny are due through May 31 (docket #11-65). Oppositions to those petitions are expected by June 10. The last chance for push back is June 20.

These Qualcomm license transfers, if approved, "would further empower an already dominant wireless carrier to leverage its control over devices, backhaul, and consumers in ways that stifle competition," warn Free Press, Public Knowledge, the New America Foundation, the Media Access Project, and the Consumers Union. "As with other mergers, the competitive impact of the two transactions in combination may be even greater than the impact of each separately."

And so if the FCC doesn't quickly deny the Qualcomm deal "as requested by numerous parties," both proceedings "should be combined to enable a full and complete competitive analysis," the quintet of reform groups urge.

What Qualcomm has

AT&T wants Qualcomm's Lower 700MHz D and E block licenses in Boston, Los Angeles, New York, Philadelphia, and San Francisco. These high quality "beachfront broadband" licenses reach over 70 million people. Additional Qualcomm spectrum covers another 230 million consumers across the rest of the country.

"Preliminary review of the application indicates that in various license areas, post-transaction AT&T would hold between 6 and 80 megahertz of spectrum below 1 GHz," the telco's spectrum assignment application notes.

80MHz in one market area is a whole lot of MHz. The plan is to couple Qualcomm's "underutilized spectrum" (AT&T's phrase) with paired spectrum that AT&T already possesses, so that smartphone users can uplink on one frequency and downlink on another.

"Once compatible handsets and network equipment are developed, this will, according to the Applicants, allow AT&T to provide a more robust wireless broadband service over its new LTE network," AT&T says. The proposed AT&T/Qualcomm deal was in day 78 of FCC consideration as of Thursday.

The case against both mergers

The argument against the AT&T/T-Mobile merger boils down to AT&T possessing an unacceptably large chunk of wireless broadband market share. But that's the case with the AT&T/Qualcomm acquisition as well, the reform groups charge.

Licenses for this beachfront spectrum below the 1GHz mark are "disproportionately held by two companies, AT&T and Verizon Wireless," they note "The proposed Qualcomm license transfer would only further this competitive disparity." So it makes no sense for the FCC to consider one merger/transfer proposal in isolation from the other:

Applicants attempt to argue simultaneously that AT&T faces substantial competition from a large number of wireless carriers, and that AT&T needs additional spectrum licenses to continue to operate its business. Neither of these arguments is true—and certainly, both cannot be true at the same time, as most of AT&T's supposed competitors possess far smaller and far less valuable spectrum license holdings. Furthermore, AT&T and Qualcomm did not acknowledge the proposed merger between AT&T and T-Mobile in their filings in the Qualcomm docket, including in the opposition filed after the T-Mobile merger was officially announced, even though such a transaction is clearly relevant to the determinations that the Commission must make in reviewing the 700MHz license transfer application.

"The proposed merger between AT&T and T-Mobile would reshape the entire American wireless industry in a single stroke," the groups conclude. Bottom line: if the FCC doesn't reject the Qualcomm deal outright. It should consolidate both applications into one package, "so that the full scale of AT&T's increasing market dominance can be evaluated."

Matthew Lasar / Matt writes for Ars Technica about media/technology history, intellectual property, the FCC, or the Internet in general. He teaches United States history and politics at the University of California at Santa Cruz.